Coronavirus Act 2020, residential lettings and extended notice periods

26.03.2020

The Coronavirus Act 2020 received Royal Assent on 25 March 2020. It includes important changes to the period of notice landlords must give when terminating certain residential tenancies.

Coronavirus Act 2020

Notice periods

The Act temporarily extends the minimum notice period to three months for the following types of possession notice:

  • HA 1988 section 21 - assured shorthold tenancies.
  • HA 1988 section 8 - assured tenancies (shorthold and non-shorthold).
  • HA 1985 section 83 - secure tenancies.
  • HA 1985 section 83ZA - secure tenancies / antisocial behaviour.
  • HA 1996 section 128 - introductory tenancies.
  • HA 1996 section 143E - demoted tenancies.
  • HA 1985 section 107D - flexible tenancies.
  • Notice to quit - protected tenancies under the Rent Act 1977.
  • Notice of intention to commence proceedings - statutory tenancies under the Rent Act 1977.

The 3-month notice period is required if the notice is served in England and Wales from today, 26 March 2020. As things currently stand the longer notice requirement will remain in force for notices served up until 30 September 2020.

The Government may however extend the application of longer notices beyond 30 September by regulations (Sch.29, para 1(1)) or extend the notice period required up to six months (Sch.29, para 13(1)). Ministers have wide ranging powers to vary the legislation.

If you need to refer to the Act, the provisions relating to possession notices are:

  • Section 81, and
  • Schedule 29.

Sch 29, para 10 modifies some of the prescribed forms. The Government has published amended notices for assured and secure tenancies in England.

Many readers will have noticed that the above provisions fall short of what was characterised by Government last week as a 'complete ban on evictions' (and yesterday as a 'complete moratorium').

The emergency legislation does nothing to change the existing rights of landlords and licensors when terminating licences or other types of residential tenancy.

Other types of occupier

Those familiar with landlord and tenant law will know that many people don't occupy their homes under the types of tenancy referred to above.

Some residential occupiers only have 'basic protection'. This means the landlord is entitled to possession but must obtain a court order. An example would be an employee occupying tied accommodation, which goes with their job.

Other occupiers are excluded from any form of statutory protection and are only entitled to reasonable notice before they can be legally deprived of possession (i.e without a court order being required). These 'excluded occupiers' are always at more risk of immediate exclusion, but never more so than in the present crisis.

Examples include:

  • Lodgers, i.e. persons living in accommodation which is under the control of an owner or tenant residing in the property.
  • Tenants sharing living accommodation with a resident landlord.
  • Those with permission to occupy temporary accommodation provided by a council under an interim homelessness duty.
  • Licensees of public sector hostels.

Possession proceedings

The emergency legislation does not prevent a landlord applying for a possession order or pursuing a claim that has been issued.

However, we have already seen some (but not all) county courts adjourning possession claims. There have also been reports of bailiffs in some areas being unavailable or not scheduling evictions.

The Housing Minister has tweeted that guidance has been given to judges and bailiffs which means:

...it is extremely unlikely that any possession proceedings will continue during this period. If there is evidence that this is not the case, we will of course review.

It may be that the administration of possession claims will be far more significant in limiting - at least for the moment - the numbers of residential tenants being evicted.

A practical cessation of possession claims could mean an estimated 20,000 actions put on hold.

Pre-action protocol

The Ministry of Housing also announced last week their intention to introduce a pre-action protocol in relation to possession claims by private landlords. This would set out the steps which landlords should ordinarily take before issuing possession proceedings. Although the wording of the announcement suggests the existing protocol will be widened in scope, we will have to wait to see if the requirements are less onerous for private landlords, as opposed to social landlords (as one would perhaps expect).

Rent

Tenants remain liable for rent. Clearly many of those who have lost income will be accumulating arrears.

Landlords may be securing a break in mortgage payments from their lender. While landlords can choose to 'pass this on' by foregoing rent there is no obligation to do so.

Some tenants may be able to negotiate a reduced rent or rent holiday, but this is at the landlord's discretion. Many landlords will decline to waive liability and instead seek agreement about repayment of arrears over time, often from point in the future.

Clearly, there's a massive risk of large numbers of tenancies being terminated once the crisis subsides.

One would think that the Government will be keeping a watchful eye on developments. As already mentioned there is always the possibility of further legislation.

Pressure on statutory services

In the past few days statutory homelessness services in many councils have unsurprisingly been finding it difficult to cope with the volume of people requiring accommodation.

This hasn't been helped by the actions of some hotel chains (such as Travelodge and Britannia Hotels) who have excluded guests at short notice.

Tenants ending tenancies

Another effect of the current crisis will be tenants wishing to end tenancies they can no longer afford, particularly if friends or family are able to accommodate them.

There are no changes to the rules governing notice to quits by tenants. Well advised landlords will be checking whether tenants are able to give notice (it may be a fixed term tenancy with no break clause) and whether any notices received are valid (there are rules governing the validity of notice to quits given by periodic tenants).

Tenants who can't afford their rent may also approach their landlord and invite them to agree an immediate termination ('surrender') of the tenancy. Here, again, the landlord will generally be able to insist on notice or, if the tenant is within a fixed term, payments until the end of the fixed term.

Of course, if there's little prospect of the landlord receiving rent they might agree an early termination, particularly if they're able to find another tenant. Having said that the practicalities of cleaning, checking and re-letting properties are very difficult indeed given the limitations on social contact.

Uncharted territory

As with many other sectors the lettings industry and housing organisations are currently navigating uncharted territory. With things moving fast it will pay to keep an eye on developments.

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